Calvert W. Simmons v. Margaret C. Miller

Summary

The Supreme Court of Virginia held that a minority shareholder in a closely held corporation may not maintain individual claims against corporate officers or directors for injury to the corporation, declining to adopt a closely held corporation exception to the rule that breach-of-fiduciary-duty claims must be brought derivatively. The court also held the evidence insufficient to sustain statutory conspiracy claims under Code §§ 18.2-499 and -500 against Miller and Kear, and insufficient as a matter of law on proximate causation for the derivative legal malpractice claim against attorney Kear, while upholding the derivative verdicts against Miller for breach of fiduciary duty and conversion because the statutory business judgment rule did not cover her secret organization of a competing entity. Finally, it held the non-competition clause in Miller's employment agreement overbroad in function, geography, and duration and therefore unenforceable as against public policy. The court affirmed in part, reversed in part, and entered final judgment.